Neighborhood Intel

3 legal battles could spell big changes for property taxes and housing vouchers in NYC

  • The state’s highest court ruled that a case challenging the city’s property tax system can move forward
  • Renters whose CityFHEPS housing vouchers were incorrectly terminated could be eligible again thanks to a settlement
Celia Young Headshot
By Celia Young  |
March 20, 2024 - 1:20PM
A gavel on a wooden desk.

Two court cases, and one settlement, could have big implications for property taxes and housing vouchers in NYC.


New York City’s property tax system could see significant changes thanks to a ruling from the state’s highest court on Tuesday.

The New York State Court of Appeals decided that homeowners and real estate industry groups should be able to argue that New York City’s property tax system unfairly sets higher tax rates on rental buildings and small homes in low-income areas than on condos and co-ops in wealthier neighborhoods, Gothamist reported. 

The decision could herald a new tax policy for NYC, but it’s not the only court case impacting real estate in the city. Read on for an overview of two cases, and one settlement, that could change NYC’s housing voucher programs and property tax system.

A battle over Gotham’s property tax policy

The group that sued the city, dubbed Tax Equity Now New York (TENNY), argued that NYC’s property tax system violates the Fair Housing Act by disproportionately taxing communities of color. 

While a lower court dismissed the suit in 2020, the Court of Appeals found that it could move forward on Tuesday. The decision puts pressure on the city to make changes to the property tax system, said Jonathan Lippman, counsel to TENNY, in a statement.

“This opinion sends a clear signal that New York City must fix the longstanding disparities in its property tax system that have treated so many unfairly for decades,” Lippman said.

Sylvia Hinds-Radix, counsel for the New York City Corporation, said on Tuesday that the suit would need to return to the lower courts, where final determinations would be made. In the meantime, the state and city could make legislative changes to NYC’s tax policy, but New Yorkers shouldn’t expect any immediate changes to their tax bills, The New York Times reported.

Housing vouchers reinstated through settlement

In the end of another legal battle, a March 13 settlement would make renters whose housing vouchers were incorrectly terminated again eligible for assistance.

The Legal Aid Society, which filed the suit on behalf of renters in April, argued that the NYC’s Department of Social Services unexpectedly cut off renters from assistance under the FHEPS and CityFHEPS housing voucher programs, despite being eligible to renew their enrollment. 

As part of the settlement, the city will review cases to see if previous FHEPS and CityFHEPS voucher-holders should be eligible, and will update its online case management system so that caseworkers receive a pop-up notification that asks them to confirm whether a household will continue using a voucher, The City reported. 

A legal push to expand CityFHEPS

Last but not least, the city is under fire for not implementing new laws to expand the eligibility for CityFHEPS. 

Legal Aid sued Mayor Eric Adams’ administration in February because it failed to execute several City Council laws that would allow more New Yorkers to apply for CityFHEPS, including low-income New Yorkers at risk of eviction, City Limits reported. Adams has previously said that the council legislation was too pricy to carry out, and oversteps the city’s legal authority, Gothamist reported.

The New York City Council moved to join Legal Aid in the class action suit at the end of February. The council is confident it will be able to join, and win, the lawsuit, says Rendy Desamours, a city council spokesperson.

“The city has consented to the council's motion to intervene and we are confident the judge will rule we can join,” Desamours said in a statement. “This case is simple for us—the mayor must implement duly enacted laws and that's what our case is about. New Yorkers experiencing homelessness and at risk of eviction are entitled to relief granted to them by city law.”

If the suit is successful, it could significantly expand who is eligible for the CityFHEPS program anyone at risk of eviction or experiencing homelessness, including those who are not living at city shelters. It would also raise the maximum amount of money a person can make while using a voucher from no more than 200 percent of the federal poverty level to up to 50 percent of the area median income.

“Our hope is that we're able to increase access for people that are in need, people that are at risk of eviction, and [those] in shelter, giving them some measure of comfort in the place they live,” says Robert Desir, a staff attorney at Legal Aid.

But it's difficult to say how long the case could take, Desir added.

“There haven't been any conversations between the council and the city about the bills and any compromise, at least that we're aware of," Desir says. “So it's really hard to tell, because we don't know how far apart we are.”


Celia Young Headshot

Celia Young

Senior Writer

Celia Young is a senior writer at Brick Underground where she covers New York City residential real estate. She graduated from Brandeis University and previously covered local business at the Milwaukee Business Journal, entertainment at Madison Magazine, and commercial real estate at Commercial Observer. She currently resides in Brooklyn.

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